What does the 'Special' causes of loss coverage for a Desi District franchise include?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
xhibit D).
- B. Insurance. You must obtain insurance as described in the Franchise Agreement and in our Brand Standards Manual, which includes (i) "Special" causes of loss coverage forms, including fire and extended coverage, crime, vandalism, and malicious mischief, on all property of the Business, for full repair and replacement value (subject to a reasonable deductible); (ii) Business interruption insurance covering at least 12 months of income; (iii) Commercial General Liability insurance, including products liability coverage, and broad form commercial liability coverage, written on an "occurrence" policy form in an amount of not less than $1,000,000 single limit per occurrence and $2,000,000 aggregate limit, (iv) Business Automobile Liability insurance including owned, leased, non-owned and hired automobiles coverage in
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 26–29)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees are required to obtain specific insurance coverage, including 'Special' causes of loss coverage. This 'Special' causes of loss coverage must include fire and extended coverage, crime, vandalism, and malicious mischief. This coverage applies to all property of the Desi District business and must be for the full repair and replacement value, though it is subject to a reasonable deductible.
In practical terms, this means a Desi District franchisee needs to secure an insurance policy that specifically lists these perils as covered. Fire and extended coverage typically protects against damage from fire, smoke, explosions, windstorms, hail, and other common hazards. The inclusion of crime, vandalism, and malicious mischief ensures that the franchisee is protected against losses resulting from theft, intentional damage, or destruction of property.
The requirement for 'full repair and replacement value' is significant because it means the insurance should cover the entire cost of repairing or replacing damaged property with new items, up to the policy limits, without deduction for depreciation. The 'reasonable deductible' means the franchisee will have to pay a certain amount out-of-pocket before the insurance coverage kicks in. Franchisees should carefully consider the deductible amount when selecting their insurance policy, balancing lower premiums with higher out-of-pocket costs in the event of a claim. Desi District also requires that the insurance policies list them and their affiliates as an additional insured and include a waiver of subrogation in their favor. They also require 30 days' prior written notice of cancellation.